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Penguin Group Starts Strong in 2007

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Penguin Group Starts Strong in 2007 FOR IMMEDIATE RELEASE PENGUIN GROUP STARTS STRONG IN 2007 Penguin Group Reports 2007 First-Half Operating Results Underlying Sales Up 1% and Underlying Profits Up 11% New York, New York, July 30, 2007…The Penguin Group, part of Pearson (FTSE: PSON; NYSE: PSO), the international media company, today reported its operating results for the first half of 2007, showing continued margin improvement despite the impact of the weak U.S. dollar on exchange rates. Underlying sales for the first six months were up 1 percent over 2006 at the mid-point and underlying profits were up 11 percent over last year’s first-half performance. John Makinson, Penguin Group Chairman and CEO, commented, “We are delighted with Penguin’s performance so far in 2007. It’s been a testing trading period for chain bookstores, but we continue to see good growth in online sales and the supermarket channels in the UK. The consistent quality of our publishing has allowed us to maintain progress in sales, while the double digit growth in our underlying profits reflects continued success in the management of our cost base. There is more to come in the second half. A long list of great authors and titles should ensure continued growth and success.” For most of the year to date, U.S. bookstore sales have been trending downward. For the January through May period, bookstore sales were down 4.3 percent (according to the U.S. Census Bureau). In a relatively weak market, Penguin Group (USA) has had a very good start to the year, is on plan at the half-year mark and expects to meet its targets for 2007. David Shanks, CEO, Penguin Group (USA), said, “We’re very pleased that we have outperformed the market and that our publishing programs have delivered so many New York Times bestsellers, including such blockbuster phenomena as A Thousand Splendid Suns by Khaled Hosseini, The Assault on Reason by Al Gore, and Eat, Pray, Love by Elizabeth Gilbert. We are also very excited to be publishing so many highly anticipated fall titles by such authors as Alan Greenspan, Patricia Cornwell, Sue Grafton, Ken Follett, Jan Karon and Nick Hornby.” In the first half of 2007, Penguin Group (USA): ∞ Held a #1 Position on the New York Times Bestseller Lists 70 Percent of the Time ∞ Headed Bestseller Lists with Two of the Most Widely Talked-About Books of the Year ∞ Outperformed Its Previous New York Times Bestseller Performance, Year-over-Year ∞ Continued to Increase Sales of the Top Multimillion-Copy Trade Paperback Titles ∞ Achieved Further Growth in the Premium Paperback Format ∞ Built Mass Market Authors into New York Times–Bestselling Hardcover Authors 1 ∞ Fostered Bestseller Synergy Between Adult and Young Readers Divisions ∞ Led the Industry in the Hottest New Genre: Paranormal ∞ Achieved a Record Number of New York Times Young Readers Bestsellers ∞ Surpassed the Number of New York Times Bestseller Weeks in Paperback Year-over- Year, Driven by Newly Created Successes ∞ Received Literary Awards and Honors ∞ Increased Audio Sales Globally, Penguin Group: ∞ Is Moving Ahead on Digital Objectives ∞ Is the World’s Leading International Book Brand, and Continues to Grow in Emerging Markets Looking Ahead: A Very Strong Fall 2007 List: Penguin Group (USA)’s impressive Fall list features such highly anticipated titles as The Age of Turbulence by Alan Greenspan (Penguin controls world volume rights), Book of the Dead by Patricia Cornwell, T is for Trespass by Sue Grafton, Home to Holly Springs by Jan Karon, World Without End by Ken Follett, and Slam, Nick Hornby’s first novel for young adults. In the second half of 2007, new titles are coming from many of the house’s other major bestselling authors, including Nora Roberts, Daniel Silva, John Sandford, Clive Cussler, Dave Barry, Sylvia Browne, William Gibson, Lou Dobbs, Garrison Keillor, Stuart Woods, Michael Pollan, Dick Francis, J. D. Robb, Eric Jerome Dickey, Robert B. Parker, and Jenny McCarthy. And from the Young Readers Group, new books are coming from Jan Brett, Anthony Horowitz, Brian Jacques, Jan Karon, Madonna, and Mike Lupica, among others. Held a #1 Position on the New York Times Bestseller Lists 70 Percent of the Time Seventy percent of the first twenty-six weeks of the year featured a Penguin Group (USA) title at #1 on the New York Times bestseller lists. The house achieved four #1 New York Times bestsellers simultaneously for the week of June 17: A Thousand Splendid Suns by Khaled Hosseini, #1 on the hardcover fiction list; The Assault on Reason by Al Gore, #1 on the hardcover nonfiction list; Eat, Pray, Love by Elizabeth Gilbert, #1 on the paperback nonfiction list; and The Book of Useless Information by Noel Botham and The Useless Information Society, #1 on the Advice, How-To and Miscellaneous paperback list. Headed Bestseller Lists with Two of the Most Widely Talked-About Books of the Year Khaled Hosseini’s A Thousand Splendid Suns (Riverhead) was the #1 book in the nation at the half-year point: #1 on the New York Times hardcover fiction bestseller list and #1 on virtually every national bestseller list, including USA Today, The Wall Street Journal, The Washington Post, Los Angeles Times, San Francisco Chronicle, The Boston Globe, Chicago Tribune, The 2 Denver Post, Rocky Mountain News, Publishers Weekly, and the Fort Wayne Journal Gazette. In addition, the title has been #1 on BookScan and the overall Book Sense list as well as #1 on regional Book Sense lists across the nation. A Thousand Splendid Suns, featured coast to coast on national television and radio as well as the Internet, received unanimous critical acclaim and sparked national discussion. The book went back to press five times before its May 22 publication date. Overwhelming market demand sent Riverhead back to press for another 100,000 copies on the on-sale date. The very next day, another 100,000 copies were printed. An additional 100,000 were ordered the following night. Another 200,000 copies were ordered following the Memorial Day holiday weekend as the book continued to fly off shelves in the chains, the clubs and the independent bookstores. Sales of this book continue to grow; there are now more than 1.4 million copies in print. Al Gore’s The Assault on Reason (The Penguin Press), also published May 22, informed the debate on America’s past, present, and future. It debuted at #1 on the New York Times hardcover nonfiction bestseller list. Gore’s book draws on a life’s work in politics and environmental activism, and offers a farsighted and powerful manifesto for clear thinking in our time. Outperformed Its Previous New York Times Bestseller Performance, Year- over-Year Penguin Group (USA)’s total New York Times bestsellers at the half-year mark of 2007 are tracking ahead of last year’s overall performance at the half-year point. Penguin Group (USA) titles claimed more than half (nine out of fifteen) of the slots on the New York Times paperback fiction bestseller list for the week of February 4. Nearly half of the hardcover fiction New York Times bestsellers were Penguin Group titles for the weeks of June 24 and July 1. Putnam achieved five hardcover fiction New York Times bestsellers for the week of July 29. No other single imprint in the industry has had more than three hardcover fiction New York Times bestsellers in one week so far in 2007. Continued to Increase Sales of the Top Multimillion-Copy Trade Paperback Titles In 2007, Penguin published yet another trade paperback phenomenon: Eat, Pray, Love. It joined The Kite Runner, The Memory Keeper’s Daughter, as well as The Secret Life of Bees on Penguin Group’s growing roster of multi-million-copy trade paperback blockbusters. Eat, Pray, Love by Elizabeth Gilbert (Penguin) has been #1 on the New York Times paperback nonfiction bestseller list for eleven of the last twelve weeks, twenty-six weeks on that list overall, and #1 on the National Book Sense nonfiction trade paperback list for more than four months. After nineteen reprints in hardcover, the trade paperback edition has benefited from extensive 3 word-of-mouth and appears to be a book every woman wants to give to every other woman. Readers are reporting, “I find I need to keep going back to the store to buy it for another one of my friends. I can’t leave anyone out.” Sales of Eat, Pray, Love continue to build, with each week’s exceeding the previous week’s. The Kite Runner by Khaled Hosseini (Riverhead) More than 4.7 million copies shipped; 124 weeks on the New York Times paperback fiction bestseller list, and still growing. The Memory Keeper’s Daughter by Kim Edwards (Penguin) More than 3 million copies shipped; 57 weeks on the New York Times paperback fiction bestseller list, and still growing. The Secret Life of Bees by Sue Monk Kidd (Penguin) More than 4.5 million copies shipped; 102 weeks on the New York Times paperback fiction bestseller list. Achieved Further Growth in the Premium Paperback Format The new paperback format pioneered by Penguin Group (USA) has contributed significantly to mass market’s increased profitability. Norman Lidofsky, President of Paperback Sales, commented, “This format has been reserved for some of our top-tier fiction authors. The Premium Edition, which we launched in 2005 before any other publisher, continues to work for us. It’s a win for the publisher, the author, the bookseller, and especially for the reader, because it combines convenient size, good-quality paper, and a highly readable interior design. In 2008, we plan to convert backlist titles to the Premium format.” First-half 2007 Premium Edition New York Times bestsellers included Polar Shift by Clive Cussler (Berkley), Dead Watch by John Sandford (Berkley), The Hostage by W.
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